Mankind's Giant Bargain Bin

[MrPhil]

I’m reposting my question from another thread whose title seems to have stifled the discussion because of poor grammar. Sorry if you’ve already seen it.
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One of the strengths usually mentioned with making Indie games is the ability to satisfy a niche market too small for the big boys but still has room for one or two Indie players. I have no experience selling a game yet, but this makes me question why prices around $20 seems to be the norm.

My thinking goes if you are satisfying a market the big boys are ignoring then you have a rare and unique product. Rare and unique typically means luxury prices, not discount prices. Say you make a game for Cereal Box Collectors that they go nutz for, why shouldn’t you charge $50 or $70? Higher prices keep the developer making the game they desire by giving the developer the security and incentive to continue to support the product and even make improvements instead of closing up shop and getting a full time job or making a mass-market product.

Actually it just dawned on me that Kai Backman’s ShortHike (used to be Space Station Manager) is probably an example of what I’m talking about. I believe he used to charge around $20 but now is selling $50 annual subscriptions. It makes sense to me that he has changed his business model this way because he is satisfying a unique game niche and his audience is probably happy to support his efforts with luxury prices, well maybe not luxury but definitely not discount. In return the gamers get a specialized game they enjoy, that continues to get support, and improved to boot. This would only be possible if the developer was given the security and incentive provided by a higher price. (I apologize if I’m putting words into your mouth Kai, feel free to correct and clarify my thoughts on your game.)

Granted some Indie games don’t fit into niches that way and so I can understand the discount mentality, but is my thinking flawed when it comes to specialty games and niches? Does the typical consumer really think the internet is one giant bargain bin?

[ManuelFLara]

Partly I agree with you, on the idea of really rare niche markets like ShortHike (really amazing and inspirational to me), but the problem with charging more than $20 or $30 is that A LOT of people thinks these games are not worth paying that much, keeping in mind that mainstream games that cost millions to develop, are sold by 'little' more, so it'd be like a 'steal' from the developer to charge a similar price, or something like that.

ShortHike's case is different, since it's not a single product but a complex simulation with modding capabilities that (from word of the developer) will be updated and improved for life.

[Diodor Bitan]

I agree with this thread - the main idea however is not to just raise the price of your existing product, but to choose a product type that can allow for a higher price - and the question: what such types can there be?

I nominate a diplomacy game with really good tutorials and AI.

[Lerc]

I certainly think that some things could go that way. The simple matching/arkanoid/etc. games will have to stay cheap to keep with the competition.

Other areas perhaps would do better with a $50 price tag. You would have to make people feel that they are getting their moneys worth. Things that spring to mind.

Make games that have a lot of content, and feel like they took a long time to make. RPGs or something that is large and intricate.

Make people feel like they are getting something special. Ship the game on CD in a tin. Perhaps a manual that is a little more than the simple printed all-expense-spared version that comes with standard retail games. Depending on how much of that $50 you wish to divert into physical product presentation you could make it look very specy indeed.

Actually, If you had a good RPG, and a nice manual I'd even have an option to buy a $100 version to get a full leather bound manual. There are people who would be totally sucked in by that. Trust me, I know some of them.

[And anthony could make manuals individualy out of clay]

[mahlzeit]

The Spiderweb RPGs are slightly more expensive than $20, especially with hint book included. The Battlefront games are also more expensive than the typical indie game.

Personally, I think the One Game Focus (http://forums.indiegamer.com/showthread.php?p=26133) strategy, combined with a price in the $50 range, is the way to go. But, of course, that requires a game that is not a Bejeweled clone.

[MrPhil]

Diodor Bitan - Balance of Power – awesome game

Lerc - Cuneiform leather bound manuals, LOVE IT!!!

mahlzeit - Strategy guide is a great idea as well

These ideas are definitely ways to maximize the games 'luxury' appeal.

ManuelFLara - I believe that the cost of a game doesn't necessary have to be a bases for price. Sure you can use the "we spent $10 million" line as a marketing technique, but as a ‘producer’ your prices do not have to be set by your costs. I mean look at clothing labels.

Hugo Boss Crew Neck T-Shirt 3 Pack (http://www.amazon.com/exec/obidos/redirect?tag=mrphilgame-20&path=tg/detail/-/B0006H3RQQ/sr=1-9/qid=1108600577/ref=sr_1_9/?%5Fencoding=UTF8&n=1040658&s=apparel&v=glance) = $32

Hanes 3 Pack Crew Neck T-Shirt (http://www.amazon.com/exec/obidos/redirect?tag=mrphilgame-20&path=tg/detail/-/B0001ZO0WI/sr=1-4/qid=1108600528/ref=sr_1_4/?%5Fencoding=UTF8&n=1040658&s=apparel&v=glance) = $12.60

The Hugo Boss prices is 2.5 times more but I doubt that the cost of making a Hugo Boss shirt is 2.5 times more.

[milieu]

I looked at making t-shirts, and they were surprisingly expensive...$12-16 per shirt at most places I looked. I got it down to $8.49 per shirt, but the shirt pattern would have to be pretty simple -- 1 color front, 4 color back. Plus you had to order 144 at that price, so I would have ended up paying $1222 up front...and I wasn't even sure anyone would buy a shirt.

I really like the idea of providing more than just a CD with a printed label and a PDF manual, but the down side is you end up paying a lot up front for inventory that you could get stuck with.

[Air]

I looked at making t-shirts, and they were surprisingly expensive...$12-16 per shirt at most places I looked. I got it down to $8.49 per shirt, but the shirt pattern would have to be pretty simple
And when you find out the actual cost to wholesalers it really puts it into perspective : My mom's business is making t-shirts on-request at dog shows. It costs her about $3.00 materials per shirt (plus $600 initial investment for the heat press), and she sells them for $18 a pop. And she doesn't really buy in bulk either. The overall cost of materials would probably be around $2.30 a piece if she were doing 3x or 4x her current level of sales.

Given that the time needed to make each shirt is about 20 seconds, and the time needed to print a transfer is about 30 seconds, you'd have to figure either games are waaay under-priced and/or t-shirts are waaay over-priced. The trouble is that the gamer market is just a lot more competitive. It's a labor of love which means there are a constant influx of people trying desperately to break into the industry (and not because they expect it to pay well), and the customer base is smaller than that of the basic t-shirt. Shirts have a level of practicality and social interaction/reward to them that most games lack. Just as people can easily justify dropping $20+ on an evening at a resturant, they can pretty easily justify dropping $20 on a neat little shirt they can wear around over the course of a year and show off to all their friends.

Nothing beats the lure of voluntary public branding as a method of retail cost certainty. ;) So if you can find a way to create that sense of public branding with indie games it might work out in our favor.

[tentons]

I believe that the cost of a game doesn't necessary have to be a bases for price.
I agree. If someone will pay $20, they'll probably pay $30. Doesn't matter how much content there is, really. It just depends on how much they want the game. If someone won't pay more than $20, IMHO it's more likely to be a personal budget limit rather than a perception of low value for the price.

[Diodor Bitan]

Original post by MrPhil
Diodor Bitan - Balance of Power – awesome game

I meant the board game "Diplomacy" - its fan following is extremely dedicated and certainly wouldn't mind paying a lot for a good computer game. Of course, getting the AI right is vastly difficult, and I don't know the legalities involved in using the exact Diplomacy rules.

[MrPhil]

I meant the board game "Diplomacy"
Oh right, that's a great game too. Sounds like you might have the beginnings of a great and popular game, as far as legalities go, I’m positive you couldn't call it Diplomacy without trouble but I doubt the rules of the game are protected. Besides, wouldn't the fun be to add some changes or alternate game play?

@milieu & Air - Making T-shirt is a good idea to increase a games value, and it sounds like your data supports my postulation that cost does not have to be a bases for price.

I thought of another good example on the drive to work today: cars! There are plenty of well branded cars whose price is well over the manufacturing cost. If you look at all the different cars available in the US you’ll basically discover that for almost every price conceivable there is a car being sold at it. From basic cheap used car for a few hundred dollars to brand new sports car for a couple hundred thousand dollars.

The more I think about it I guess price should really be a factor of WHO you are selling too. If you are going for some hardcore strategy gamers they will expect a $50-60 price on a game but a casual Mom with kids isn’t going to consider a game at that price level.

Personally, I think the One Game Focus strategy, combined with a price in the $50 range, is the way to go. But, of course, that requires a game that is not a Bejeweled clone.
Should have said it earlier but I totally agree and this is the approach I’m taking too. And you are right, it looks like the thread Shareware Business Model - the One Game Focus (http://forums.indiegamer.com/showthread.php?t=2092) has some good related discussion.

[Diodor Bitan]

Original post by MrPhil
Oh right, that's a great game too. Sounds like you might have the beginnings of a great and popular game, as far as legalities go, I’m positive you couldn't call it Diplomacy without trouble but I doubt the rules of the game are protected. Besides, wouldn't the fun be to add some changes or alternate game play?

No :) The point is to offer the Diplomacy fans a quality tool they can use for their hobby - changing the rules makes the whole thing pointless as you lose the very market that was willing to pay the higher price.

[MrPhil]

No :) The point is to offer the Diplomacy fans a quality tool they can use for their hobby - changing the rules makes the whole thing pointless as you lose the very market that was willing to pay the higher price.
Good point. I just imagined a sort of "2nd Edition" set of rules you could optionally play by sort of like Axis and Allies. Which, if I'm not mistake, has a the "3rd Edition" now.

[gpetersz]

Well I might be failed to understand the whole thing...
Is the market really small? Or it is a market of people who don't want that
shiny 3D things those called AAA titles nowadays and they don't want to pay for it. On the other side they love playing games but they want it to be cheaper. Not to mention that if you want buy AAA titles you have to have
an AAA hardware to run them well, while the cheaper indie games runs on older hardware as well.

There might be an other group (or possibly mingled with the first, I am one of them) who thinks that today's AAA titles (not all but many of them) are empty, lifeless, gone too commercial, spiritless and so and like to play real funy games.

What I wanted to say: what if it is a hardcore attribute of the market to buy games at $19.99 and if you raise the price your market is not there any more.

When you talk about luxury that would mean something BETTER (techniqually) then the usual. A Ferrari is luxury and aimed at a way narrower market as a Ford (or Opel for example), but a Ferrari is doubtless BETTER.

If you take an indie game that rarely looks as good as Diablo II, or Doom3
(I am not talking about gameplay where Diablo rulez, but Doom3.... according to my opinion). So you cannot sell something at luxury prices what does not look a way BETTER then the "usual" AAA stuff.

I think indie games attract their market by gameplay (replayable, fun and original) and PRICE.

It's just my 2 cents, and I am open to other opinions as well. :)

[Kai Backman]

I'll just add my 2 cents. Pricing is a pretty complex beast. You might like this (http://www.joelonsoftware.com/articles/CamelsandRubberDuckies.html) article that Jim cited earlier. :)

Also do a few searches both on the main forum and in the Dexterity archives. The low price mentality isn't as ingrained as you think.

[gpetersz]

Hey, I've read Steve Pavlina's articles, those made me think about being an indie! :)

I don't want anything to be underpriced, I only wanted to point out that
the prices of indie games were settled around their REAL value.
Why? Because that market want these kind of games ON these prices.
I think a raise would cause some of the market turn away and go after other source of joy. You have to compete not only with other games but with the TV, movie, theme parks and so. (It's is Steve's articles as well... :D).
So some part of the customers would say, ah, I don't need this I go to 3 movie instead...

So I think it is false to think an indie game as a luxury product. It is what it is on its real price. In my opinion.

But anyway you are right it is a complex beast, in some cases (with some enthusiast customer base, with an ever evolving game (something connected to a fantasy world (like Krynn) or somekind of game mechanism (Java robots) or so, you can have a fan-base of some 100 or 1000 that might keep you alive even if you sell it on 19.99 or 49.99.

[MrPhil]

The low price mentality isn't as ingrained as you think.
Okay, I’ll take you word for it, maybe this was more of an exercise to get ME out of the mentality! Thanks for pointing out the article it was a good one. Joel on Software is good stuff.

@gpetersz – I was imagining a game that gave a special group something they couldn’t find anywhere else, graphics or otherwise. So most people would rather buy movie tickets instead, but those Cereal Box Collectors would prefer the special game. Using you Ferrari example, it is definitely a better sports car than a 4Runner, but not many mudders are going to pay more for the Ferrari. They want to drive in mud, rivers, hills etc and a Ferrari isn’t very good for that. Certainly Indie can compete on price, but I also think it can compete by filling a niche and in that situation should not charge more.

[cliffski]

competing on price is stupid. I write simulation games. You can get Sim City 4 secondhand for £5, should I charge £4 for my games? Hell no! We arent seeling carrots or beans here, each game is unique. Its similar to the phenomena you see with movies. Just because steven spielberg makes family movies doesnt mean he has to compete equally with every other diretor. Some people want 'spielberg movies'. some people want 'russ meyer' movies. Customers have different tastes. Don't make the mistake of thinking people buy entertainment like they buy potatoes. Nobody else makes your game.